Firstcall Research's report on Sonata Software
"The company net profit jumps to Rs 321.38 million against Rs. 196.81 million in the corresponding quarter ending of previous year, an increase of 63.29%. Revenue for the quarter rose by 38.78% to Rs. 1245.99 million from Rs. 897.83 million, when compared with the prior year period. Reported earnings per share of the company stood at Rs. 3.06 a share during the quarter, registering 63.29% increase over previous year period. Profit before interest, depreciation and tax is Rs. 442.95 million as against Rs. 264.75 million in the corresponding period of the previous year. The company scaled up its engagements with strategic customers across ISV, Retail and Travel segments, by helping in their digital information in the areas of omni-channel commerce, mobility, social and analytics. The core drivers of its performance thus continued to get strengthened."
OUTLOOK AND CONCLUSION
At the current market price of Rs.143.50, the stock P/E ratio is at 12.85 x FY15E and 10.79 x FY16E respectively.
Earning per share (EPS) of the company for the earnings for FY15E and FY16E is seen at Rs.11.17 and Rs.13.30 respectively.
Net Sales and PAT of the company are expected to grow at a CAGR of 33% and 107% over 2013 to 2016E respectively.
On the basis of EV/EBITDA, the stock trades at 8.82 x for FY15E and 7.27 x for FY16E.
Price to Book Value of the stock is expected to be at 3.99 x and 3.44 x respectively for FY15E and FY16E.
"We recommend ‘BUY’ in this particular scrip with a target price of Rs 170 for Medium to Long term investment", says Firstcall Research Report.
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